Opaque and often-ignored, the Conflicts of Interest Board is the steward of honest city government -- the public principles police. Charged with overseeing the intersections of the private and public lives of the city's 300,000 municipal employees, the quasi-judicial body seeks to ensure employees act in the interest of the people -- not themselves.

But in that honest and worthwhile pursuit, the board's intent has been questioned. Its five members are all appointed by the mayor, rubber-stamped by the City Council, and with that some City Hall observers wonder whether the board is as independent as it should be -- especially during an administration with as much private interest as Mayor Michael Bloomberg's.

What makes the board go after some activities, such as a moonlighting city sheriff, while letting other questionable conflicts sneak by?

Independence in Opinions

On the steps of City Hall last week, Council members Letitia James and Bill de Blasio announced the next step in their fight against extending term limits: A lawsuit that names the city's Conflicts of Interest Board, among others, as a defendant.

The board, in one of its most publicized decisions, issued an opinion last month stating the City Council did not violate the city's conflicts of interest law when it voted to extend term limits to three terms from two.

In response, James asked: "Why bite the hand that feeds you?"

Some critics say the board inherently caters to City Hall, because the mayor selects its members -- albeit with City Council approval -- and the position comes with a certain amount of prestige. In addition to overseeing the conflicts of interest of every municipal employee -- it issues hundreds of letters and opinions a year and fines those it finds guilty -- the board also opines on matters of conflict within the mayor's office.

That, critics contend, is in itself a conflict of interest.

"Voters have a right to expect these decisions to be regulated by an objective body, and the COIB's composition hinders the appearance of their impartiality on this issue," said Councilmember Bill de Blasio in a prepared statement, regarding the term limits decision. "We must ensure that these types of governing bodies fulfill their duty to provide objective judgment on critical governmental matters in our city."

Board staff and several members dismiss that criticism.

"You're choosing people who are known for their integrity, who are known for their objectivity," said Angela Mariana Freyre, a board member since 2002. "We are by no means a rubber stamp of the mayor."

Board members say they are selected for their independence and fairness. Given the extra work and the hours (three of the five members do not take the $250 per diem they could get), members say serving is an act of volunteerism with no personal, private benefit. They would not decide an issue hoping to be reappointed, they argue.

"I'm not beholden to him," said Andrew Irving, a board member, of the mayor. "If he is still mayor when my term is up and he decides to appoint me for another term, fine. If not, that's OK too."

A spokesman for the Bloomberg administration said board members cannot be removed at the mayor's will, which was done "by design" to do away with any conflict of interest.

And the council, said Councilmember Daniel Garodnick, a member of the committee that oversees mayoral appointments, interviews and investigates every nominee.

"In light of the fact that these are six-year terms with staggered dates of
completion and they have advice and consent of the council, at some point you need to have faith that boards will act independently of the people that have appointed them," Garodnick said.

Where Interests Lie

But does the board favor the current administration?

According to an analysis by Gotham Gazette, 10 public opinions or letters have directly pertained to Bloomberg since he took office in 2002. Several of the opinions required Bloomberg to recuse himself from certain negotiations at City Hall, which dealt with either Bloomberg L.P. -- the company he founded -- or other companies in which he held assets. Six of the nine opinions or letters of advice require Bloomberg to limit his involvement in the policy at hand.

These decisions, observers say, show no favoritism.

In comparison, a handful of letters of advice were issued during the Giuliani administration directly dealing with the mayor. Several of them limited his actions, including requiring the former mayor to recuse himself from dealings with the city after he left office to found a consulting firm.

"It wasn't different either procedurally or substantially," said Bruce Green, a former board member from 1995 to 2005, who heads the Louis Stein Center for Law and Ethics. "There is an effort to make the decisions consistent."

The board's structure -- based on mayoral appointments -- is not unusual for this type of quasi-judicial body, say City Hall observers. And, members say, it is far better than if they were elected, which would replace rule of law with rule of politics.

"Of course it presents a situation that has its perils, but the people who have held those positions, particularly the chairs, have been very independent people," said Ross Sandler, a professor of law at New York Law School and director of the Center for New York City Law. "Even though the mayor has played a decisive role about appointments, it hasn't influenced the results particularly."

Private Interests in the Public Sector

Bloomberg tackles city government like a business -- measuring progress in quarterly reports, tourism rates and other statistics. What else would you expect from the founder of a multi-billion dollar company, whose net worth was estimated at $20 billion by Forbes this year.

But with that comes unique circumstances for the board, which needs to put the best interests of the city first. Under the Bloomberg administration, private sector connections are far more common than they were in other administrations.

"There have been some extraordinarily challenging issues that the conflicts board has had to address in this administration because of the unprecedented wealth of the mayor and in some cases of other members of his administration," said Randy Mastro, a former deputy mayor in the Giuliani administration who is suing the city over the term limits decision.

Each time someone vacates City Hall, it's likely the board will have another case to look into.

For instance, is it a conflict for the mayor to solicit donations from his wealthy Upper East Side brethren for nonprofits whose goal is to rebuild ground zero? Is it OK for Bloomberg to fundraise from his well-known corporate friends to bring the Olympics to the Big Apple? In both cases, the board said it was.

In another highly publicized opinion, the board allowed former deputy mayor Daniel Doctoroff to continue to advise the city on certain development projects he spearheaded, even after he had moved on from his city job. He now heads Bloomberg L.P.

Normally, public employees are prohibited from appearing before the city for a year after they leave their positions. And, going further, they are prohibited from lobbying on issues they had direct involvement in.

In Doctoroff's case, the board said the work the former deputy mayor would do on behalf of the city would benefit New York's interests, not the personal interests of Doctoroff.

This is not an unprecedented board position, though. Several times during the Giuliani administration the board allowed a former city employee -- granted, not anyone as high profile as Doctoroff -- to work for outside interests, in one case nonprofits, that would have overlapping interests with the employee's previous position.

Obscure With Fluorescent Lighting

Though the board has hit the limelight recently, it was barely noticed not long ago.

Up 10 flights at 2 Lafayette Street downtown, the walls are eerily white -- reminiscent of the innards of a psychiatric hospital on a made-for-TV special. Beyond an eggshell-painted door adjacent to a marquee with the name, "Conflicts of Interest Board," are 21 employees -- the entire staff of the board, which is miniscule compared to most city agencies.

It's there that the board staff weeds out private, personal interest by responding to complaints by officials and the public and by giving advice to public servants who ask. It oversees thousands of pages of financial disclosure forms required for every city employee, containing personal assets and outside income of public employees, and the city's lobbyist gift law.

Its meetings -- which are rarely open to the public -- aren't listed on its web site. In fact, they are held out of the halls of public buildings, but instead -- at least since 1990 -- occur in the private quarters of the board's chair, who happens to be a partner at a reputable midtown law firm.

The vast majority of its letters, which advise public servants on what is or what is not a conflict of interest on a case-by-case basis, are not released publicly. In 2007, about half of the board's 604 pieces of advice were never disclosed to the public.

The board cites privacy rights.

"What we do is inherently confidential," said Irving. "It's a matter of balancing the public's right to know with the very legitimate privacy expectations of individual employees."

Conflicts, Conflicts Everywhere

While the board is charged with boosting confidence in government integrity, it must protect the privacy of the public servant. Murkiness in the city's law doesn't help the board, or the public, decipher, what it can and cannot do.

For instance, is it OK for a high-ranking official to publicly endorse a book published by a non-profit educational institution? According to a decision by the board in 1995, it's not.

But can public employees accept discount offers from a local bank, which any ordinary citizen can also nab? Sure they can.

"This particular law is not designed to be a broad code of ethics and to define what kind of behavior for public servants or people in general is ethical and unethical," said Steven Rosenfeld, the chair of the five-member board. "It is limited to what are considered conflicts of interest."

Those quote-unquote conflicts are decided by five people, with the advice of the board's executive director and counsel, in the confines of Rosenfeld's offices. The members are attorneys, financial consultants, corporate counsels and a president of a local business improvement district.

Before 1989, the board comprised several members of the mayor's office, including the sitting administration's counsel. That structure raised significant questions of independence, and it was dissolved in the city's charter revision.

Since the 1989 charter revision, the opinions and complaints the board has received have skyrocketed. In 1993, the board received 23 conflicts of interest complaints. In 2007, it got 20 times that at 465.

This is not saying people are becoming less ethical. Most board staff and members attribute it to the agency's enhanced visibility.

Missing the Mark

There is little process to determine who, what or when the board will go after a conflict of interest. For one, they have no investigative arm and instead rely on the city's Department of Investigation to look into certain cases. Because it is such a small agency, it does not look into issues or conflicts unless it receives a complaint.

As a result, for example, the board failed to catch the City Council slush fund scandal that overwhelmed City Hall earlier this year. No one had ever filed a complaint about possible conflicts of interest between discretionary fund allocations and council members.

"We can only know what's brought to our attention since we don't have an investigative arm," said Rosenfeld, the board's chair.

For years, the board has been lobbying for greater independence, from control over its own budget to gaining subpoena power. A spokesman for the administration says City Charter revision commissions have in the past reviewed the board's independence and have chosen not to act on these requests.

"I think that having our own investigation authority would enable us to control our priorities," said Irving.

Because it only acts on complaints, the board's cases can arise from personal prejudice or even malice. A colleague would have to report that a librarian was relentlessly promoting his daughter's book.

You can bet an employee reported that an interim principal at P.S. 60 was sending aides to run personal errands or that a planning commissioner, Dolly Williams, voted on a major rezoning project that affected a personal investment.

But there is also no clear line on who gets a warning letter -- an ethical slap on the wrist -- and who receives a $10,000 fine. The board, say staff, uses its own prosecutorial judgment to weigh the offense.

So when one councilmember, Sara Gonzalez, used her city stationary to send a letter to a city agency contesting a personal violation, she was warned not to do it again. But when a Department of Health and Mental Hygiene pest inspector, Yulan Nash-Daniel, checked out a quality of life complaint at an uncle's church without telling a supervisor, the inspector was suspended for eight days, valued at $1,496.

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